Cirrus Logic Inc (CRUS)

Cash conversion cycle

		Mar 31, 2025	Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021
Days of inventory on hand (DOH)	days	121.29	95.03	90.59	58.90	95.54
Days of sales outstanding (DSO)	days	41.58	33.15	28.94	49.23	28.98
Number of days of payables	days	25.61	23.23	31.61	49.11	56.65
Cash conversion cycle	days	137.26	104.96	87.92	59.02	67.87

March 31, 2025 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 121.29 + 41.58 – 25.61
= 137.26

The cash conversion cycle for Cirrus Logic Inc has shown fluctuations over the years. As of March 31, 2021, the cash conversion cycle was 67.87 days, indicating that the company takes approximately 67.87 days to convert its invested cash into cash inflows from sales.

By March 31, 2022, the cash conversion cycle improved to 59.02 days, suggesting that the company was able to more efficiently manage its working capital and convert its investments into cash at a faster rate. However, by March 31, 2023, the cash conversion cycle increased to 87.92 days, reflecting a potential slowdown in the company's ability to collect receivables, manage inventory, and pay its suppliers.

The trend continued as of March 31, 2024, with the cash conversion cycle growing to 104.96 days, indicating a longer period of time taken to convert investments into cash. This could imply challenges in managing working capital efficiently or potential issues in the company's operations.

As of March 31, 2025, the cash conversion cycle further increased to 137.26 days, reaching its highest point in the period analyzed. This prolonged cash conversion cycle may signify potential liquidity concerns or inefficiencies in the company's working capital management processes.

In conclusion, the fluctuating cash conversion cycle of Cirrus Logic Inc over the period analyzed reflects variations in the company's operational efficiency and working capital management. Monitoring and optimizing the cash conversion cycle is crucial for maintaining liquidity, managing cash flow effectively, and sustaining financial health.